Consumers were moderately optimistic again in December.
This story first appeared in the December 31, 2014 issue of WWD. Subscribe Today.
The Conference Board’s Consumer Confidence Index rose this month after declining in November. The index is now at 92.6, up slightly from November’s reading of 91. The present-situation component rose to 98.6 from 93.7 last month, while the expectations portion fell less than a point to 88.5 from 89.3. The November reading was adjusted upward from the original figure of 88.7 after hitting its highest level in seven years, 94.1, in October.
Lynn Franco, director of economic indicators at the Conference Board, said, “Consumer confidence rebounded modestly in December, propelled by a considerably more favorable assessment of current economic and labor market conditions.”
The present-situation index is now at its highest level since February 2008. Helping consumers feel better and more confident is their more positive assessment of the job market. Those who said jobs are “plentiful” rose to 17.1 percent from 16.2 percent.
Longer term, or six months out, consumers were less optimistic about the jobs front, with those who said they anticipated more jobs in the months ahead falling to 14.7 percent from 15.5 percent.
Chris G. Christopher Jr., director of U.S. consumer economics at IHS Global Insight, said consumer confidence is “almost 19.5 percent higher than it was a year ago.” He cited plummeting gasoline prices and “well-received employment reports” as the main drivers of confidence.
Falling gas prices also helped deliver a fairly strong holiday season, and the International Council of Shopping Centers and Goldman Sachs on Tuesday said an increase in gift-card purchases for the season should provide retailers with additional opportunities to build revenues in January and the months beyond.
Michael Niemira, research consultant to ICSC and principal of The Retail Economist LLC, noted that 11 percent of shoppers waited until the final week before Christmas to begin their buying. “Looking ahead to January, consumers reported that the share of their total holiday gift purchases that went into gift cards rose to 24.6 percent compared to 23.7 percent in 2013, reinforcing the importance of post-Christmas shopping and gift-card redemption,” he said.
Although the purchases are already made, retailers can’t recognize them as revenue until they are redeemed.
In the seven days following Super Saturday on Dec. 20, sales were up 2.2 percent from the comparable 2013 week and essentially flat — up less than 0.1 percent — from the prior week. The numbers are adjusted to account for the greater number of shopping days before Christmas last week in comparison to its 2013 counterpart.
Sales were strong at wholesale clubs and ahead at furniture stores but weak at department, apparel and nonapparel specialty stores.